In the short run, there are large and persistent deviations between actual exchange rates and exchange rates predicted using purchasing power parity because of:
a. Discretionary monetary policy.
b. Discretionary fiscal policy.
c. Widely different inflation rates in the two nations.
d. Very different real GDP growth rates in the two nations.
e. Many goods and services in the two nations' price indices are not traded internationally.
.E
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All economists agree that the economy is self-regulating
Indicate whether the statement is true or false
When someone with no health insurance buys a high deductible health insurance policy
A. the premium for the policy falls below what it would be without the deductible. B. insurance for a large loss is present but small losses are not insured. C. the moral hazard problem is reduced. D. All of these are true.
The table above gives data for the nation of Mosh. If we graphed these data, we would see that when GDP equals
A) $10 trillion, the AE curve intersects the 45° line. B) $9 trillion, the AE curve intersects the 45° line. C) $6 trillion, the AE curve is below the 45° line. D) $10 trillion, the 45° line is above the AE curve. E) $4 trillion, the AE curve intersects the 45° line.
Allocative efficiency is achieved when firms produce goods and services
A) that consumers value most. B) at a marginal cost of zero. C) at the lowest possible cost. D) at the lowest opportunity cost.